In early trading on Wednesday, March 12, U.S. stock markets moved lower, with the Dow Jones Industrial Average falling more than 400 points. Investors continued to monitor developments in the U.S.-Iran conflict and trends in oil prices. A drone attack by Iran on Oman's largest oil storage facility raised concerns that hostilities could escalate into a broader confrontation disrupting global petroleum supplies.
The Dow dropped 445.64 points, or 0.93%, to 47,260.87. The Nasdaq Composite declined 25.33 points, or 0.11%, to 22,671.77. The S&P 500 fell 23.39 points, or 0.34%, to 6,758.09.
The decline followed an Iranian drone strike on oil storage facilities at the port of Salalah in Oman, marking the latest attack on energy infrastructure in the Gulf region. Market participants worry that the Middle East conflict could widen into a full-scale confrontation centered on global oil supplies.
According to maritime security firm Ambrey and Omani state media, fuel storage tanks at the port were hit in the attack, though commercial shipping in the area was not affected.
West Texas Intermediate crude futures rose 4% to around $86 per barrel. Brent crude futures also climbed 4%, reaching $91 per barrel. The price increases occurred even after the International Energy Agency announced it would release 400 million barrels of oil—its largest ever strategic reserve release—to counter supply disruptions caused by the war.
Ron Albahari, Chief Investment Officer at Laird Norton Wetherby, stated that the IEA's decision "does not address other issues that will impact the global economy." He cited the transport of refined products, such as jet fuel, through the Strait of Hormuz as one of the challenges.
He told media, "I think the market is struggling with how to find a way out. Both sides are entrenched, and it’s difficult to see a positive resolution in the near term."
Continued conflict could keep oil prices elevated. On Tuesday, U.S. forces sank several Iranian vessels, including 16 mine-laying boats, near the Strait of Hormuz after Tehran attempted to lay mines in the crucial oil transit channel.
The United Kingdom Maritime Trade Operations also reported on Wednesday that three cargo ships near the Iranian coast, one of them in the Strait of Hormuz, had been struck by shellfire.
These developments came just days after former President Donald Trump stated earlier in the week that the war would end "soon."
In a Wednesday report, Emmanuel Cau, Head of European Equity Strategy at Barclays, wrote, "Trump’s suggestion that the war may end soon, following an unusually sharp spike in oil volatility, signals to us that his 'tolerance limit' has been reached." He added, "The longer oil prices remain elevated, the greater the downside risks to earnings and valuations."
Meanwhile, the U.S. Consumer Price Index for February rose 2.4% year-over-year, matching expectations from economists surveyed by Dow Jones. The report follows recent signs of a softening labor market.
Oracle stood out as a bright spot on Wednesday, with its shares jumping 10% after the software provider reported third-quarter earnings and revenue that exceeded analyst forecasts. The company also raised its revenue outlook for fiscal year 2027.
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